Hutchison CEO bemoans Indian port restrictions, Shenzhen overcapacity
The head of Hutchison Port Holdings said earlier this week that his company likely won’t consider any projects in India until the political winds in the South Asian nation change, the Financial Times reported.
At a ceremony to mark renovation work at the Port of Felixstowe in the United Kingdom, Hutchison Ports’ Chief Executive Officer John Meredith told the newspaper that the roadblocks in front of Chinese investors in Indian ports has proved frustrating.
'It's a very confused and muddled position,' Meredith said. 'So what we've decided to do is, when we find something we would be interested to become an investor in, we would go through the whole process and make the proper submissions. At the moment, we don't see too much point creating too much fuss about the whole thing until we find something that's of interest to us.'
Security officials and politicians in the Indian government have sought to block Hutchison (as well as any other Chinese terminal operator) from acquiring a stake in any container port development in India over concerns that the Hong Kong-based company has strong ties with China’s central government in Beijing. Ironically, Hutchison has been allowed entry into the country’s telecom sector, as it previously operated a cell phone service provider joint venture with Indian conglomerate Essar. That venture was sold to Vodaphone last year.
Meredith said another problem in India is the high financial burdens placed on terminal operators by the Indian government. He said the government expects to collect 40 percent to 50 percent of revenue in exchange for terminal concessions.
Meanwhile, Meredith also told the Financial Times that Hutchison was disappointed to see overcapacity developed in port clusters in Shenzhen and South Korea. Hutchison operates terminals in Yantian (Shenzhen’s biggest individual terminal complex) as well as Busan and Gwangyang in South Korea. Lastly he said he wasn’t overly concerned about the growth of fast-moving competitor Dubai Ports World.
'I think we are more sensitive to returns, as opposed to their view that they really want to get pins stuck on the map globally, at any price,' Meredith said. 'So we do tend to look a bit askance at some of the approaches they make.'